Latest news with #Russell1000Value
Business Times
04-08-2025
- Business
- Business Times
Why technology retains its dominance in investments
SINCE US President Donald Trump launched the trade war, global financial markets have been volatile, but I believe that technology-related industries will be able to maintain their leadership position and bring considerable opportunities to investors. In the past few years, investors have focused their attention on the Magnificent 7: Apple, Microsoft, Amazon, Alphabet (Google's parent company), Meta, Nvidia, and Tesla. However, in the face of changing circumstances, we believe investors should broaden their horizons. The technology sector, broadly defined, includes stocks categorised according to the Global Industry Classification Standard (GICS) as broadline retail, movies and entertainment, and interactive media and services. They can be collectively referred to as 'Broad Tech', which aligns with the stocks making up the Nasdaq 100 index. Broad Tech includes the so-called Magnificent 7, except Tesla. The industries represented by Broad Tech have dominated the US stock market since the late 1990s. Their outperformance has accelerated with the advent of the artificial intelligence (AI) revolution. Moreover, the US trade war has less impact on them, because their export revenues are mainly driven by services, which are largely insulated from tariffs on goods. This may explain why since 'Liberation Day' on Apr 2, there has been comparatively less impact on earnings expectations for these stocks, whether in the US or emerging markets. Overall, the US index that best represents Broad Tech industries is the Nasdaq 100; for the remaining sectors in the market, a good proxy is the Russell 1000 Value index. It should be noted that although Broad Tech largely consists of growth stocks, not all growth stocks belong to Broad Tech industries. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up If you are looking for Broad Tech investment opportunities, the US market is of course the first choice. In the MSCI USA Index, Broad Tech industries make up about 46 per cent of the market capitalisation. Asia is not bad either: in the MSCI Emerging Asia Index, the weight is 33 per cent. In contrast, Japan and Europe's Broad Tech stocks account for only 14 per cent and 9 per cent of their respective MSCI indices. US equity: AI still the growth engine After the US election, many investors had expected the US economy and stocks to benefit from Trump's victory, but the result was initially not as expected. In local currency terms, the S&P 500 Index fell by 3 per cent between election day and the end of the first quarter, compared to a 1 per cent rise in the MSCI All Country World Index ex-USA (ACWI, local currency terms). The US performance was disappointing partly due to the larger-than-expected US tariffs. In addition, the US consumer market showed signs of slowing down. In the first quarter of this year, US personal consumption expenditures (PCE) increased by only 0.1 per cent, compared to the prior quarter (seasonally adjusted annual rate), well below the 0.8 per cent average rate of 2024. Retail sales were also lower. Meanwhile, Europe and China brought a lot of good news. Europe promised to increase its defence budget and Germany has big infrastructure plans, while China was boosted by AI breakthroughs. For all the weakness of US consumer demand, the economy has had a surge in business investment. This has been concentrated in information processing equipment and software, reflecting the key role AI is playing in US economic growth and corporate profits. The economic data released by the US after Liberation Day has been mixed, but generally positive. Second-quarter GDP showed a strong rebound; retail sales have slowed; the labour market is softer but resilient; Purchasing Managers' Indices have mostly improved. We have yet to see a significant inflationary effect from tariffs. Predictions remain fraught, however, as the current economic environment is unique and traditional forecasting models may be less effective. If positive factors such as US deregulation and fiscal stimulus policies bear fruit, and if the US can negotiate to lower the tariffs its exporters face, the US stock market may continue its positive trend in the coming months. However, if trade negotiations with China break down, or US consumer demand weakens more than expected, the stock market will face risks. Emerging markets: China's tech breakthrough In emerging markets, there are also many Broad Tech options. The launch of DeepSeek highlighted that even if the US imposes restrictions on the export of advanced technologies to China, China still has significant domestic capabilities to spur innovation. Led by Broad Tech companies, the MSCI China index outperformed developed market equities by a wide margin in the first half of this year. China saw a phenomenon similar to the US, where a few technology stocks dominated. The CSI Global China Internet index has dominated the performance of the broader market index. One could say that if investors can accurately judge the direction of China's technology stocks, they will grasp the pulse of the broader market. Compared with the strong performance of the CSI index, the MSCI China A Onshore index has lagged, indicating that factors such as the real estate bubble and Sino-US trade tensions are still plaguing the domestic market. Some analysts believe that China can offset the impact of US tariffs by stimulating domestic demand, but it is still too early to say whether it will be effective over the medium term. Chinese investor sentiment has not yet recovered from the Covid pandemic, and if the real estate market continues to be sluggish, households may remain cautious about consumption. European equities: Focused gains Although European stock markets have a lower Broad Tech share, they delivered a good performance in local currency terms, rising by 6 per cent in the first quarter of this year – far better than the S&P 500. Monetary policy is a key driver of the market rise. As the European Central Bank has cut interest rates, bank shares have outperformed. In addition, Europe's sharp increase in defence spending and Germany's fiscal stimulus policy have improved investor sentiment towards European stock markets. In conclusion, the current market environment has parallels with early 2024, when many investors expected the economy to enter a recession and consequently underweighted equities. Today, many are worried about the impact of tariffs. Of course, investors must always be conscious of risks, but the global economy seems resilient and may yet bring more positive surprises this year. One should also not lose sight of the benefits of easier monetary policy from central banks, including the US (eventually). Although the US may no longer be as exceptional as it was, there are many other attractive growth themes in global markets. The writer is chief market strategist, BNP Paribas Asset Management
Yahoo
28-05-2025
- Business
- Yahoo
What Makes PepsiCo (PEP) an Investment Bet in a Volatile Market?
Matrix Asset Advisors, an asset management company, released its Q1 2025 investor letter. A copy of the letter can be downloaded here. After two years of gains exceeding 20%, the stock market rally ended in February when the president intensified his tariff threats. Technology and Growth stocks drove the stock market's first-quarter decline. Matrix's portfolios performed well during a challenging quarter. The Matrix Dividend Income portfolio recorded a slight positive return, while the LCV portfolio, which is more exposed to Technology, experienced a modest decline. Matrix's Large Cap Value Portfolio (LCV) was down low single digits in Q1, surpassing the S&P 500® Index's loss but behind the Russell 1000 Value's 2.14% gain. Matrix Dividend Income (MDI) started the year positively, growing low single digits in Q1, ahead of both the S&P 500®'s loss and the Russell 1000® Value Index. In addition, please check the fund's top five holdings to know its best picks in 2025. In its first-quarter 2025 investor letter, Matrix Asset Advisors highlighted stocks such as PepsiCo, Inc. (NASDAQ:PEP). PepsiCo, Inc. (NASDAQ:PEP) is an American multinational company that manufactures, markets, and distributes various beverages and convenient foods. The one-month return of PepsiCo, Inc. (NASDAQ:PEP) was -3.11%, and its shares lost 23.24% of their value over the last 52 weeks. On May 27, 2025, PepsiCo, Inc. (NASDAQ:PEP) stock closed at $131.37 per share with a market capitalization of $180.12 billion. Matrix Asset Advisors stated the following regarding PepsiCo, Inc. (NASDAQ:PEP) in its Q1 2025 investor letter: The market's volatility during the quarter gave us the opportunity to be more active than usual with portfolio buys and sells. On the buy side, we added two new positions to the portfolio, Generac and PepsiCo. PepsiCo, Inc. (NASDAQ:PEP) is a leading snack and beverage company. We know the company well, having owned it several times, buying during pullbacks, and selling when we thought the stock was fully priced. The current opportunity to buy the shares for our LCV portfolio is the result of a deceleration in the company's top-line growth and concerns about the potential impact on demand for the company's core products because of the new weight loss drugs and the opposition to soda and processed foods by the new secretary of health and human services. This well-managed company, with a history of steady earnings and dividend growth, is a good investment in what we expect to be a volatile stock market. At its current price, the dividend yield is 3.6%. A close up of a glass of a refreshing carbonated beverage illustrating the company's different beverages. PepsiCo, Inc. (NASDAQ:PEP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 71 hedge fund portfolios held PepsiCo, Inc. (NASDAQ:PEP) at the end of the first quarter, which was 69 in the previous quarter. While we acknowledge the potential of PepsiCo, Inc. (NASDAQ:PEP) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains. In another article, we covered PepsiCo, Inc. (NASDAQ:PEP) and shared the list of best dividend stocks with high yields. Mar Vista U.S. Quality Select Strategy also commented on PepsiCo, Inc. (NASDAQ:PEP) in its Q1 2025 investor letter. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
28-05-2025
- Business
- Yahoo
Does Target Corporation (TGT) Stock Offer Strong Upside from the Current Price?
Matrix Asset Advisors, an asset management company, released its Q1 2025 investor letter. A copy of the letter can be downloaded here. After two years of gains exceeding 20%, the stock market rally ended in February when the president intensified his tariff threats. Technology and Growth stocks drove the stock market's first-quarter decline. Matrix's portfolios performed well during a challenging quarter. The Matrix Dividend Income portfolio recorded a slight positive return, while the LCV portfolio, which is more exposed to Technology, experienced a modest decline. Matrix's Large Cap Value Portfolio (LCV) was down low single digits in Q1, surpassing the S&P 500® Index's loss but behind the Russell 1000 Value's 2.14% gain. Matrix Dividend Income (MDI) started the year positively, growing low single digits in Q1, ahead of both the S&P 500®'s loss and the Russell 1000® Value Index. In addition, please check the fund's top five holdings to know its best picks in 2025. In its first-quarter 2025 investor letter, Matrix Asset Advisors highlighted stocks such as Target Corporation (NYSE:TGT). Target Corporation (NYSE:TGT) is a US-based general merchandise retailer. The one-month return of Target Corporation (NYSE:TGT) was 0.30%, and its shares lost 34.35% of their value over the last 52 weeks. On May 27, 2025, Target Corporation (NYSE:TGT) stock closed at $96.99 per share with a market capitalization of $44.069 billion. Matrix Asset Advisors stated the following regarding Target Corporation (NYSE:TGT) in its Q1 2025 investor letter: "The market's Q1 volatility provided opportunities to take profits on strength while very slowly redeploying the proceeds. With our larger-than-usual sales and scale-backs, we entered the current quarter with a higher-than usual cash balance, allowing us to add to some laggards and start a new position in Target Corporation (NYSE:TGT), a name we have held before in the portfolio. As we write this commentary, more stocks are nearing compelling levels, and we expect to accelerate our buying. A woman purchasing groceries at a Target store, with a cart full of products. Target Corporation (NYSE:TGT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 62 hedge fund portfolios held Target Corporation (NYSE:TGT) at the end of the first quarter, which was 56 in the previous quarter. While we acknowledge the potential of Target Corporation (NYSE:TGT) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains. In another article, we covered Target Corporation (NYSE:TGT) and shared the list of stocks on Jim Cramer's radar. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
09-04-2025
- Business
- Yahoo
ClearBridge Value Strategy Sold its Holdings in The Goldman Sachs Group (GS) in Q1
ClearBridge Investments, an investment management company, released its 'ClearBridge Value Strategy' first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the strategy underperformed its Russell 1000 Value benchmark, driven by detractors in the energy and financials, overcame contributions from overweight to energy and underweight to IT. In addition, please check the fund's top five holdings to know its best picks in 2025. In its first quarter 2025 investor letter, ClearBridge Value Strategy emphasized stocks such as The Goldman Sachs Group, Inc. (NYSE:GS). Founded in 1869, The Goldman Sachs Group, Inc. (NYSE:GS) is a financial institution that operates through Global Banking & Markets, Asset & Wealth Management, and Platform Solutions segments. The one-month return of The Goldman Sachs Group, Inc. (NYSE:GS) was -13.72%, and its shares gained 15.34% of their value over the last 52 weeks. On April 8, 2025, The Goldman Sachs Group, Inc. (NYSE:GS) stock closed at $462.22 per share with a market capitalization of $143.65 billion. ClearBridge Value Strategy stated the following regarding The Goldman Sachs Group, Inc. (NYSE:GS) in its Q1 2025 investor letter: "Our largest sell was The Goldman Sachs Group, Inc. (NYSE:GS) relatively early in the quarter, as expectations for an increased capital market cycle under the new Trump administration brought its share price in line with our assessment of fair value." A financial analyst presenting a chart of insurance solutions to a boardroom. The Goldman Sachs Group, Inc. (NYSE:GS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 81 hedge fund portfolios held The Goldman Sachs Group, Inc. (NYSE:GS) at the end of the fourth quarter compared to 72 in the third quarter. The Goldman Sachs Group, Inc. (NYSE:GS) reported net revenues of $13.9 billion EPS of $11.95, and ROE of 14.6% and ROTE of 15.5% in the fourth quarter of 2024. While we acknowledge the potential of The Goldman Sachs Group, Inc. (NYSE:GS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. We covered The Goldman Sachs Group, Inc. (NYSE:GS) in another article, where we shared Nightview Capital's views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
29-01-2025
- Business
- Yahoo
Longleaf Partners Fund Sold Warner Bros. Discovery (WBD) in Q4
Longleaf Partners, managed by Southeastern Asset Management, released its 'Partners Fund' fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund returned -1.33% in the fourth quarter, compared to the S&P 500's 2.41% return and Russell 1000 Value's -1.98% return. For the year the fund returned 8.80% compared to 25.02% and 14.37% returns for the indexes. For more information on the fund's best picks in 2024, please check its top five holdings. Longleaf Partners Fund highlighted stocks like Warner Bros. Discovery, Inc. (NASDAQ:WBD) in the fourth quarter 2024 investor letter. Warner Bros. Discovery, Inc. (NASDAQ:WBD) is a media and entertainment company. The one-month return of Warner Bros. Discovery, Inc. (NASDAQ:WBD) was -3.03%, and its shares gained 2.30% of their value over the last 52 weeks. On January 28, 2024, Warner Bros. Discovery, Inc. (NASDAQ:WBD) stock closed at $10.25 per share with a market capitalization of $25.14 billion. Longleaf Partners Fund stated the following regarding Warner Bros. Discovery, Inc. (NASDAQ:WBD) in its Q4 2024 investor letter: "Warner Bros. Discovery, Inc. (NASDAQ:WBD) – Media conglomerate WBD was a detractor in the quarter and the year. We exited our position during the quarter to reallocate capital to opportunities with stronger qualitative and quantitative characteristics. In retrospect, WBD represents an error of commission as noted above. Our original thesis did not fully account for the company's leverage and growth challenges in its linear TV and studio businesses. Adding insult to injury, the stock price has gone up since our exit, fueled by rumours of a potential linear TV business deal with Comcast. While this development offers some validation of WBD's strategic assets, it is tempered by significant insider selling following the recent stock price increase. Time will tell if our decision to sell was the right one, but our focus remains on seeking investments that are growing and on offense." A movie theater auditorium filled with an audience enjoying a blockbuster film. Warner Bros. Discovery, Inc. (NASDAQ:WBD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 49 hedge fund portfolios held Warner Bros. Discovery, Inc. (NASDAQ:WBD) at the end of the third quarter which was 48 in the previous quarter. While we acknowledge the potential of Warner Bros. Discovery, Inc. (NASDAQ:WBD) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. In another article, we discussed Warner Bros. Discovery, Inc. (NASDAQ:WBD) and shared the list of best leisure and recreation services stocks to buy. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
